Archive · 1 Oct 2026
Torrent Power’s capex expansion offers growth, but limits near-term upside
Torrent Power makes electricity and delivers it to customers.
Motilal Oswal believes the company can grow by building more renewable and thermal power projects.
Its renewable portfolio could rise to 6.3 GW by FY29.
The company also plans a large investment of about Rs 37,700 crore.
This spending could increase debt compared with its operating earnings.
Torrent Power’s electricity distribution business has low losses and high power availability.
These strengths could help the company benefit from proposed electricity reforms.
However, delays, higher costs, changing policies and fuel-price movements could reduce returns.
Because of these risks, Motilal Oswal gave the stock a Neutral rating and sees only about 4% upside.
Motilal Oswal initiated coverage of Torrent Power with a Neutral rating and a Rs 1,270 target price, implying roughly 4% upside.
Torrent Power plans to expand its renewable energy portfolio from 2.1 GW to 6.3 GW by FY29.
The company plans to spend approximately Rs 37,700 crore across FY27-FY29, potentially lifting net debt-to-EBITDA to 4.4 times from 2.3 times.
Motilal Oswal expects EBITDA to grow at a 17% CAGR and adjusted net profit at a 7% CAGR between FY26 and FY29.
Strong distribution metrics and proposed reforms support the outlook, while execution delays, cost overruns, fuel-price volatility and policy changes pose risks.
- Who
- Torrent Power and brokerage house Motilal Oswal.
- What
- Motilal Oswal initiated coverage of Torrent Power with a Neutral rating and a Rs 1,270 target price.
- When
- The coverage relates to the company’s expansion plans through FY29, with several projects scheduled through FY30 and FY32.
- Where
- Torrent Power operates across electricity generation, transmission and distribution; a planned 1.6 GW thermal project is in Madhya Pradesh.
- Why
- The brokerage sees renewable growth and strong distribution operations, but says substantial capex, rising leverage and execution risks limit the stock’s upside.
Growth supports
Risks limiting upside
Renewable expansion
Growth supports
The renewable portfolio is expected to expand to 6.3 GW by FY29, increasing scale and earnings visibility.
Risks limiting upside
The expansion requires substantial investment and could raise leverage and execution risk.
Distribution business
Growth supports
Low distribution losses, high power availability and strong metering, billing and collection practices support operating performance.
Risks limiting upside
The benefits of proposed reforms are not guaranteed, and policy changes could affect the company’s financials.
Long-term projects
Growth supports
Thermal projects, the Nabha acquisition and a 3 GW pumped storage project could support future earnings growth.
Risks limiting upside
Delays or cost overruns in thermal and pumped storage projects could hurt cash flows and returns.
- Brokerage view
- Motilal Oswal initiated coverage with a Neutral rating.
- Target price
- Rs 1,270 per share, implying around 4% upside.
- Renewable portfolio
- Expected to increase from 2.1 GW currently operational to 6.3 GW by FY29.
- Planned capex
- Approximately Rs 37,700 crore during FY27-FY29.
- Leverage outlook
- Net debt-to-EBITDA is expected to rise from 2.3 times to 4.4 times.
- Distribution performance
- The licensed distribution business has 2.3% distribution losses and 99.9% power availability.
- Earnings outlook
- EBITDA is expected to grow at a 17% FY26-FY29 CAGR, while adjusted net profit is expected to grow at 7% CAGR.